As debate rages over the Federal Trade Commission's proposed privacy system for online consumers, a number of organizations are developing technological means of enabling surfers to exercise greater control over the information collected about their Internet behavior.

The regulatory plan and new tools come at a point of growing distress over the amount of data that marketing and tracking companies often surreptitiously collect about online activity, and the increasingly sophisticated technology they have for doing so.

"Today, there's basically no practical choice that the average Internet user can make that would give them privacy online," said Peter Eckersley, a senior staff technologist for the Electronic Frontier Foundation, a privacy advocacy group in San Francisco.

The efforts to change that fall into two main approaches, each with its own strengths and weakness from a user privacy perspective - and very different consequences for the online businesses that depend on advertising revenue.

The first, advocated by the FTC in its 79-page report released at the beginning of the month, is a mechanism within Internet browsers that users can switch on to tell Web sites they don't want to be tracked. The second consists of systems that actively block the sites and tracking tools from collecting data about surfers.

Do Not Track

The FTC "Do Not Track" plan would include a regulatory mandate that online advertisers and tracking companies abide by the consumer's stated preferences, much like with the national Do Not Call registry. The commission is seeking comments on the proposals, which would require Congress to enact, through the end of January.

In a separate but related development, the Obama administration last week called for the creation of a "privacy bill of rights" that would clearly spell out principles for how online companies collect and use personal information.

Researchers at Stanford University, however, aren't waiting around for government action.

In November, a group of graduate and doctoral students at the law and computer science schools launched Donottrack.us, which offered a "proof of concept" Do Not Track technology that users can already download and install in the Firefox Web browser.

It includes a message in what's known as the header, or the beginning of a data packet that a browser sends to a Web site when first arriving, that says the consumer doesn't want information collected about them.

Of course, without finalized FTC rules, there is no legal obligation for marketing companies to abide by the request. But the hope is that consumers using the system will send a strong message to advertisers about their privacy preferences.

"Do Not Track could be supported voluntarily or through industry self-regulation, and it would be consistent with the advertising industry's purported commitment to consumer choice," said Jonathan Mayer, one of the leaders of the project, in an e-mail.

Still, he stressed that regulations forcing companies to comply with a consistent set of rules is far preferable.

Blocking

The other approach to online privacy controls is typified by a Microsoft Corp. announcement earlier this month. The Redmond, Wash., software giant said it will include an opt-in feature in the forthcoming version of its Internet Explorer browser that allows users to block tracking tools.

It's a new feature for Microsoft, but not a pioneering effort. Microsoft itself almost included the option in the latest version of IE, but killed it amid complaints from advertisers, according to a report in the Wall Street Journal.

Meanwhile, an assortment of similar third-party tools already exist, which users can download and install on their own. One of the most popular, AdBlock Plus for Firefox, boasts more than 10 million daily users.

Mozilla Foundation, the Mountain View nonprofit that developed Firefox, is working on its own technology for the upcoming version of the browser that will provide additional privacy controls, Chief Executive Gary Kovacs told a group of reporters earlier this month. It's unclear at this point which category the technology would fall into, however, and Kovacs declined to elaborate.

Users can also gain greater control over their information by tweaking the privacy settings in their browsers and within popular services like Google Inc. and Facebook Inc.

There are a number of limitations to these blocking approaches, however. For one, it requires users of varying technological sophistication to do much of the work themselves: downloading and installing extensions, or digging into and figuring out settings across a variety of sites. Another limitation specific to blocking is that tracking and marketing companies are continually finding new ways of gathering data, which can navigate around the defenses.

Without federal regulations, it's simply an ongoing arms race between the blockers and the marketers, EFF's Eckersley said.

"And the tracking technologies always seem to be two or three steps ahead," he said.

Business blow

What all of these options mean for online businesses depends largely on how they're implemented - and to what extent consumers adopt them.

Many online publishers provide their news, videos, e-mail and other services for free only because they can make money displaying advertising that is targeted to the interests that can be gleaned from a user's online activity.

There's also an entire industry of so-called ad networks, which serve as the go-between for Web sites and advertisers, that collect and use this sort of user data. The information typically only identifies a user's browser or IP address, not their actual name.

The Interactive Advertising Bureau commissioned a study last year that found online advertising generates $300 billion in economic activity in the United States. If Do Not Track is implemented in the wrong way, the New York trade group argues it could disable the underpinnings of the modern online economy.

Especially worrisome to the organization is the possibility that regulators will deem that users need to "opt out" in order to be tracked, setting Web browsers to prevent data collection by default.

"Almost every consumer would adopt it, because ... most don't care," said Steve Sullivan, a vice president at IAB. "They would not care enough to go in and turn it back off. It would be a very, very devastating blow for the industry."

He stressed that the same technology that gathers data for ads also enables customized services like filtered news and the ability to repeatedly visit favored sites without entering a password every time. If Do Not Track is too broadly defined, it could eliminate these sorts of benefits as well, he said.

Web giant Yahoo Inc., while expressing general support for the broad goals of privacy controls, also cautioned - in the lightest of language - that the online experiences people enjoy today could be at risk.

"We welcome the opportunity to sit down with policymakers to discuss commonsense solutions to protect user privacy while maintaining the free Internet model," the Sunnyvale portal said in a statement.

If enough users switch on such a system, it may lead some online businesses to create two-tiered services for consumers, said Greg Sterling, technology analyst with Sterling Market Intelligence. For instance, users who enable tracking might be able to view content for free, while those who don't could be forced to pay or simply excluded.

Informed consent

Sullivan saved his harshest words for the blocking technologies, arguing that they effectively enable the theft of ad-supported content.

"Giving consumers a way to quietly and secretly avoid advertising is akin to giving them the keys to somebody else's bank account," he said.

Google noted in a statement that blocking technology can also undermine online experiences in ways that consumers might not expect. Some users of AdBlock have noted, for instance, that they can't watch YouTube videos that carry ads - which is to say, most of them.

On the other hand, the use of these sorts of tools has had limited impact on advertising revenue to date, since the number of adopters is a small fraction of Internet users. It remains to be seen whether that changes as more consumers become aware of these issues and simpler options, like the one pre-installed in Microsoft's upcoming browser, become more widely available.

Ultimately, the economics of the Web has relied on a bargain that many users didn't fully realize they were entering: An exchange of online content for personal information. If the advertising industry wants to continue to collect user data, it needs to show what users are getting in return and allow them to knowingly make that choice for themselves, Sterling said.

"It's like informed consent," he said. "If you tell people what's going on and how their data are being used, some will opt out, but a lot of them will say it's OK when they understand the benefits."